July 30, 2009

Daley budget chief says 2010 looks worse than this year

Even after the city exhausts a $320 million rainy day fund created by leasing the city’s parking meters, it still must find $520 million in costs savings or new revenue to get through next year, officials said today.

Although new taxes are “a last resort, . . . nothing is ruled out at this point,” Chief Financial Officer Gene Saffold said during a City Hall briefing this afternoon that Mayor Richard Daley did not attend.

“The mayor has instructed us not to look at property taxes as we move forward in 2010,” Saffold added. “We’re looking for innovative solutions which will help us address this issue.”

The city plans to use $269 million of the rainy day fund to cover an anticipated 2009 budget deficit. The deficit already was reduced by $59 million, in part through layoffs, employee furloughs and union concessions that affect city services.

That would leave $51 million in the rainy day fund that will be used to reduce the anticipated 2010 shortfall, which is expected to be worse than the current year. As an example, Saffold said, labor costs are expected to increase $117 million.

He said the city was not overestimating the potential shortfall as it heads into arbitration with the police union. “These are real numbers—there are no ways around the challenges,” he said.

Saffold also threw cold water on reports of the economy heating up anytime soon. “There are some out there who think we have reached the bottom. We don’t see that,” he said.

The city last year was criticized for budget projections some called too rosy. But Saffold defended those numbers.

“Revenue forecasting is an inexact science,” he said. “If you go back to where we were last year in the fourth quarter, I don’t know that anyone had necessarily foreseen the depths of the downturn that we saw.”

Comments

Just keep giving the boot to job-and-tax-generators like Walmart and you'll see the budget situation really dive. Let's see, we don't like Walmart. Who's next that the dufus city council can keep out of the city? No problem. Everyone can work (code word for sleep) for the city. How about a tax on the intelligence of aldermen who vote to keep businesses out. Nah, that won't work. It's zero.

This demonstrates the very grave mistake the city made on the parking meters, lacking the guts to raise parking rates themselves but rather outsourcing all that revenue. Once those monies are gone, they're gone, but Morgan Stanley will still be reaping the revenue of Chicagoans for 75 years.

Other than that, it's worth noting that the city of Chicago only gets 12 percent of its revenue from the property tax, the most stable form of revenue. The city is way overdependent on sales taxes, tourist taxes and shared revenue from the state, all of which are extremely volatile in a recession. Property taxes pretty much stay put in a recession. Cities that have high property taxes and low sales taxes -- the opposite of Chicago -- don't have nearly the budget troubles that Chicago has now.

How on earth are labor costs expected to rise $117m?? Seriously. Who is getting these pay hikes? And now the city is looking for 'innovative' solutions to solve the budget gap. How about a simple solution - cut these unionized workers from the city rolls and put the rest of these leeches on a pay scale that is at least in the ballpark of what regular people get paid for for doing next to nothing.

Why, with the Wilson Yard TIF in Uptown, each subsidized family apartment costs $450,000 and each 1-bedroom senior unit costs around $330,000. We have to be swimming in cash. That's why Ald Shiller is requesting an additional $54 million so our neighborhood could have an organic not-for-profit fish farm. It's going to provide 7 additional jobs so our economy will be stimulated in the process! Anyone want to buy some organic fish? It's green technology so it must be good.

Thanks God Target is coming in as well. After Target Corporation spends $1 a year for rent and gives back 2 1/4 cents on the dollar for merchandise, we should break even in 67 years.

Don't believe the hype. The city would be fine if they stopped OVERPAYING their employees. City workers, government employees in general make more than they would in the private sector. On top of that they get sweet benefits. For example, Montel Gayles, the purchasing director who recently resigned, he started at the position in 1/08 at a salary of $157,500. His current salary is $169,000. Where else could you work and get a 7.3% increase in about 18 months. This is more the rule than the exception. Have realistic salaries and eliminate unnecessary positions like corporate America. Taxpayers are paying for the friends and family program at the city.

All 50 aldermen on the Chicago City Council had to file paperwork earlier this year detailing their outside income and gifts. The Tribune took that ethics paperwork and posted the information here for you to see. You can search by ward number or alderman's last name.

The Cook County Assessor's office has put together lists of projected median property tax bills for all suburban towns and city neighborhoods. We've posted them for you to get a look at who's paying more and who's paying less.

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